Published in Financial Services

Is George Bailey Gone Forever?

“My bank is just an app to me.”  I hadn’t really thought about it, but it makes total sense.  I was having a conversation with a client about the challenges of providing a great customer experience in banking. She mentioned that she has no allegiance to any bank because all they are is an app in her mind.  She uses online banking and has the mobile app as well.  All of her payment information is “programmed” in, so all she has to do to move her accounts is download her payees and preferences and take them to the next bank.

She rarely, if ever, goes into the local branch of her bank.  She doesn’t need to.

Eighteen years ago, First Chicago, one of the leading banks in the Chicago area at the time, implemented a service charge of $3 to visit a teller for certain customers that did not have a minimum size relationship with the bank.  First Chicago was trying to get less profitable customers to use ATMs (with a much lower cost to serve) instead of coming in to the branch.  When the program was launched it was a PR nightmare.  Customers and media outlets got the impression that the bank simply didn’t care about customers, unless they had a lot of money.

Fast forward a generation later and ATMs, online banking, and mobile banking applications are nearly ubiquitous.  Soon mobile payments will be mainstream.  Many consumers, especially Gen X and Gen Y, have no desire to enter a branch bank.  However, the same technology used in 1996 for banks to make more money, now also makes it easier for customers to leave one institution for another.  Previously banks could rely on the fact that it was pretty difficult for customers to leave the bank and go someplace else.  Not so much anymore.George Bailey

Like many other industries, to win with today and tomorrow’s customers, banks will have to differentiate on the customer experience.  It’s not enough to roll out the coolest and slickest mobile and online banking applications.  Those are easy to copy in no time flat.  Cutting-edge apps are now a cost of doing business.  So how can the customer experience be differentiated in a way that is sustainable?

Relationships. They are core to the banking business.  Helping customers achieve their dreams.  That’s what George Bailey’s Building and Loan stood for.  It’s what made George a pillar of the community.

The task is not impossible.  After all, we already know so much about customers.  Let’s be clear though.  It’s not enough to send mail, email and other messages that are tailored individually based on this knowledge.  To build real relationships and show customers you care about them as individuals, banks must engage in a two-way dialogue with customers.  In doing so, banks will understand customers better; they’ll be more relevant in their engagement with the customer and have the opportunity to build real relationships.

The optimal solution will use technology to drive this dialogue and where appropriate, a live person to address opportunities and risks, as well as important customer needs.

George Bailey got his life back once he realized the difference he made in people’s lives.  The key to banks’ ability to differentiate their customer experience and avoid being perceived as “just an app” is to find ways to make a difference in customers’ lives.